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Yum, yum! Is risk tasty again?

March 3, 2010 @ 1:09 pm | Leading Indicators | 10 comments

What do these sectors—solar energy, wind, gold, Spain, Italy, steel, metals and mining, and retail—have in common?

They’re all among market leaders today. ETFs (exchange traded funds) in these sectors are outpacing the Standard & Poor’s 500 (up 0.5% as of 12:25 ET). Claymore/MAC Global Solar Energy (TAN) was up 4.7%.  First Trust Global Wind Energy (FAN) was up 3.1%. Market Vectors Gold Miners (GDX) was up 3%. iShares MSCI Spain (EWP) was up 2.7%. iShares MSCI Italy (EWI) was up 2.6%. Market Vectors Steel (SLX) was up 2.7%. SPDR S&P Metals and Mining (XME) was up 2.5%. And Retail HLDRS (RTH) was up 2.3%.

It sure looks like investors have recovered their appetite for risk—and maybe their belief in the global economic recovery.

Some of these sectors—steel, and metals and mining, for example—are among those hit hardest in the recent almost correction based on fears that tighter restrictions on lending in China would damp the global recovery. Others—Spain and Italy, for example—have been in the headlines of the crisis in the euro.

One day doesn’t make a trend—but I think we could put together a tidy move in this direction that lasts two or three weeks. Or at least until stocks get over bought again and bump up against the top of their trading range again at 1140 to 1150 on the S&P 500 index.

After that, I think it will take some real, positive data to keep this upward trend running.

10 Comments

  1. ticktock
    ticktock on March 3, 2010 at 4:45 pm

    bsdgv, Jim did an update on ORA a few days ago. Things don’t look good.

  5. lotteollie
    lotteollie on March 3, 2010 at 3:14 pm

    I don’t trust Soros either. Off course, when you start counting on him to lie, he’ll mix it up and throw in the truth.

  6. EdMcGon
    EdMcGon on March 3, 2010 at 2:35 pm

    terryw,
    The last time I checked, Soros still had a large stake in Petrobras (PBR), which he just added to in December. This sounds like a typical Soros misdirection play: Tell everyone to get out of the area where he wants to buy.

  7. bsdgv
    bsdgv on March 3, 2010 at 2:19 pm

    Cindering that the alternative energy stuff (TAN, FAN) is up, why isn’t geothermal (ORA)?

  9. terryw
    terryw on March 3, 2010 at 1:41 pm

    http://www.youtube.com/watch?v=mnSZkcPicEA
    Mark Faber, believes long on Euro in the next 5-10 days, and that we could be in for a 20% correction when S&P hit new highs 🙂

  10. EdMcGon
    EdMcGon on March 3, 2010 at 1:20 pm

    Jim,
    Is it possible those sectors got beaten down too much?

    With relatively decent news coming out of Europe, no doubt Spain and Italy started looking attractive (although I personally wouldn’t put money in those economies no matter how attractive their stocks looked).

    As for the Gold Miners, that went up with the price of gold. Metals and Mining went up on the price of copper too.

    Wind Energy and Solar Energy? You got me on those two. I can only guess they were beaten down too far.

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